Korea and OECD: Towards New Partnership and Leadership

It is a great honour to be with you today to celebrate the 50th anniversary of the OECD as well as the 15th anniversary of Korea’s accession to our Organisation.

Allow me to thank the Korean government and our colleagues from the National Research Council for Economics, Humanities and Social Sciences, the Global Green Growth Institute, and the Korea Development Institute for hosting this event.

Today we are celebrating international co-operation. As the global economy is emerging from the crisis of our lifetimes, we have seen the value of policy co-ordination for us to be able to address many of our joint global challenges.

Facing the challenges of a fragile economy and promoting inclusive growth

The coordinated response to the global crisis was unprecedented.

But the world economy is still going through difficult times. The crisis has left many countries with a legacy of high unemployment, unsustainable public finances and lower potential output.

Korea is one of the most dynamic OECD economies. However, sustaining economic growth over the medium term requires further efforts to implement structural reforms to enhance productivity.

And we know that growth alone is not enough. To promote social cohesion and fight income inequalities, Korea needs to “go social”. An OECD report, which we will release today, offers specific recommendations to Korea for more inclusive growth which can be achieved with reforms in the following areas: employment, income distribution and poverty, gender equity, social protection, education, entrepreneurship and SMEs.

New economic realities reflected in a new architecture of global governance

The crisis was a wake-up call to improve global governance, a blunt reminder that the world has changed and that the pace of change demands constant adaptation.

Indeed, we are witnessing today a fundamental change with the centre of economic gravity moving from the advanced to the large emerging economies. Important new players need to be given a stronger voice in decision-making and indeed, multilateralism needs to become more inclusive.

The nascent rebalancing of voice and power is reflected, among other examples, in the emergence of the G20 as the “premier forum for international economic co-operation” and in the decision to reform the International Financial Institutions.

We are honoured that G20 leaders called on the OECD to provide analysis and policy advice on structural issues, ranging from employment, capital flows, taxation and combating corruption, to trade, investment and development.

We were also honoured by the opportunity to have contributed to the success of the Korean presidency of the G20 in 2010. The Korean government spared no effort for policy coordination among advanced and emerging economies and Korea’s leadership brought about important results.

Perhaps one of its most important achievements was that it succeeded in putting development on the G20 agenda.

A new approach to development

Indeed, at the OECD, we think that this is a decisive moment for development. We are doubling our efforts to help developing and emerging countries to reduce inequalities, fight corruption, improve public services and build competitive business frameworks. And we have received a new mandate from our anniversary Ministerial meeting to develop a broad Strategy on Development.

Korea has unique perspectives to share as the first OECD country to graduate from being a receiver of aid to an official donor by joining the OECD’s Development Assistance Committee in December 2009.

We also look forward to working with Korea towards a successful High-Level Forum on Aid Effectiveness next November in Busan, in order to push the aid agenda forward in the spirit of partnership between countries at different levels of development.

New sources of growth

Let me conclude with some major challenges facing the OECD and Korea in the years to come.

Against a backdrop of climate change, lasting unemployment and large fiscal deficits, we must identify and foster new sources of growth. The OECD Innovation Strategy, released last year, has contributed significantly to the measurement and analysis of how innovation stimulates economic growth and social advancement.

The OECD Green Growth Strategy, championed by Korea and released last month, is the start of OECD’s longer-term agenda to support national and international efforts to promote green growth and jobs. This will include food and agriculture, so important for the livelihood of billions of people, where we will illustrate how policies can contribute to greener growth.

Over the coming years we look forward to working with Korea on the implementation of your own “Green New Deal” policies and in turn, we count on your support to the implementation of the OECD Green Growth Strategy worldwide.

Today, we need to raise confidence, not only GDP. Following on the Busan Forum on "Statistics, Knowledge and Policy”, we are accelerating our work on measuring progress in our societies, introducing new tools, like “My Better Life Index” and a “How’s Life” report.

Ladies and Gentlemen,

Fifteen years of co-operation between the OECD and Korea are only a start of what I believe will be a long and mutually beneficial journey. Today, we need to work together to foster a new era of co-operation and a new sense of global responsibility.